Delhi District Court
Orient Bell Ltd vs Puneet Seth Prop Faalcon on 12 February, 2024
IN THE COURT OF Ms. KIRANDEEP KAUR,
METROPOLITAN MAGISTRATE, NI ACT-03, WEST DISTT.
THC, DELHI
JUDGMENT
Complaint Case No. 20970/2016
CNR No. DLWT02-010465-2016
Title Orient Bell Ltd. Vs. Mr.
Puneet Seth, Proprietor of
M/s. Faalcon
Name of Complainant Orient Bell Ltd.
Name of Accused Mr. Puneet Seth, Proprietor of
M/s. Faalcon
Date of Institution of Complaint 15.07.2016
Date of arguments 09.01.2024
Date of Pronouncement 12.02.2024
Offence complained of Under Section 138 NI Act
Offence charged with Under Section 138 NI Act
Plea of accused Pleaded not guilty
Final Order Acquitted
In furtherance of the mandate of Sec. 355 of the Criminal Procedure Code, 1973. The judgment in the afore titled case is delivered below:-
1. Complainant's Case:
1.1 It is the case of the complainant that the complainant is finance company is manufacturing and sale of premium quality of ceramic and vitrified tiles throughout India. The accused is the sole proprietor of M/s.
Faalcon. The accused company have been purchasing tiles from the complainant company from time to time. The complainant company in the Ct. Cases 20970/2016 Orient Bell Ltd. Vs. Puneet Seth Proprietor of M/s. Faalcon Page No. 1 of 11 ordinary course of its business has been maintaining a running account of the firm of the accused. Complainant company discovered that there was a significant outstanding liability on the accused against which the accused was legging to clear the payments. On 29.02.2016, the liability of the accused in the books of the complainant company was found to the tune of Rs. 3,23,145/-. After much persuasion and efforts accused issued cheque bearing No. 049867 dated 15.02.2016 for amount of Rs. 3,23,835/- drawn on Axis Bank Ltd., Sector-46, Gurugram Branch.
1.2 Upon the presentment of the said cheque, the said cheque was dishonored with the remarks "payment stopped by drawer" vide memo dated 06.05.2016.
1.3 In light of the above, the complainant was constrained to issue legal notice dated 31.05.2016 calling upon the complainant to pay amount of dishonored cheque within 15 days from receipt of legal notice. Despite the service of legal notice, the accused neither complied with terms of notice nor replied to the said notice. Failure thereof, laid to the filing of the present complaint.
2. Accused's Defence :
2.1 The accused entered defence and was duly notified (as per the mandate of S. 251 of the Criminal Procedure Code, 1973) of the offence imputed against him. Accused pleaded not guilty and claimed to be tried.
The accused in defence stated that "the complainant had a transaction of supplying tiles with Imperia Infrastructure Pvt. Ltd. The accused firm used to work for the said company i.e. Imperia Infrastructure Pvt. Ltd. The Ct. Cases 20970/2016 Orient Bell Ltd. Vs. Puneet Seth Proprietor of M/s. Faalcon Page No. 2 of 11 complainant had supplied the material to Imperia Infrastructure Pvt. Ltd. and the said company had told me as the proprietor of my firm to get the billing done in my name. I had issued the said cheques to the complainant company as security cheques. The said cheques however were put into the bank and I had stopped payment of the said cheque because I did not owe any liability towards the complainant. I am not aware whether or not Imperia Infrastructure Pvt. Ltd. had paid the complainant the amount that the company owed to the complainant. Since there was no transaction executed between me and the complainant, I do not owe any liability to the complainant. The said cheque in question bears my signature and all the other details on the said cheque have been filed by me. I did not receive any legal demand notice from the complainant".
2.2 In addition to this, in his statement u/s. 313 Cr.P.C. accused explained that has not received the legal demand notice. He issued the present cheque as a security cheque to the complainant on the assurance of Mr. Ashok Kukreja who was Sr. Project Manager of M/s. Imperia Structures Pvt. Ltd. He never done business with the complainant. He was doing interior work for M/s. Imperia Structures Pvt. Ltd. He has filed commercial suit against M/s. Imperia Structures Pvt. Ltd. He does not have any liability towards the complainant. Complainant has misused the present security cheque in question.
2.3 The accused has denied receipt of legal notice.
3. Applicable Legal Provisions :
3.1 The ingredients which needs to be satisfied for bringing culpability Ct. Cases 20970/2016 Orient Bell Ltd. Vs. Puneet Seth Proprietor of M/s. Faalcon Page No. 3 of 11 under s. 138 of Negotiable Instrument Act has been expounded by the Hon'ble Apex court in the case of Kusum Ingots & Alloys Ltd. vs. Pennar Peterson Securities Ltd. And Others (2000) 2 SCC 745; the same is reproduced below:
" (i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account for the discharge of any debt or other liability;
(ii) that cheque has been presented to the bank within a period of six months from the date on which it is drawn of within the period of its validity whichever is earlier;
(iii) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
(iv) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
(v) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice;"
3.2 It is only upon the concatenation of the aforementioned ingredients that the culpability under s. 138 of Negotiable Instrument Act can be secured. The legal position being thus. Let us examine the factual matrix on this legal touchstone.
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4. Appreciation of evidence and marshalling of the facts:
4.1 Issuance of Cheque:
The complaint beholds the onus of proving the issuance of cheque in his favour and the said issuance has to be done on an account maintained by the accused. In this regard, complainant as CW-1 has disposed through his affidavit (CW-1/A) that accused in order to discharge his liability has issued Cheque no. 049867 dated 15.02.2016 for Rs 3,23,835/- drawn on Axis Bank, Ex. CW-1/5 in favour of the complainant. Accused has not disputed the cheque belongs to his bank account. The accused has not denied his signatures on the cheque. Thus, the fact of issuance of cheques by the accused, on an account maintained by him, to the complainant can be regarded as uncontroverted and duly proved.
4.2 Presentment and dishonor of cheque: It has to be satisfied that the cheque was presented within the statutorily prescribed time limit and further that upon presentment for encashment the same was returned unpaid by the bank. To this effect, Complainant as CW-1 through his affidavit (Ex. CW1/A) has deposed that cheque in dispute was presented for encashment but the same was dishonoured due to "payment stopped by drawer" in the account of the accused. In order to evince the veracity of his deposition, CW-1 has brought on record Original cheque (Ex. CW-1/5) and return memo (Ex. CW1/6) showing the dishonor of cheques due to payment stopped by drawer. At this juncture, it is pertinent to mention that Section 146 NI Act provides that bank's memo is prima facie evidence of the fact of dishonour of cheque. The accused has not disputed to the factum of presentment and dishonor of cheques. Thus, the presentment and the subsequent dishonour of cheque stands established.
Ct. Cases 20970/2016 Orient Bell Ltd. Vs. Puneet Seth Proprietor of M/s. Faalcon Page No. 5 of 11 Accordingly, it is duly proved that the cheque has been dishonored.
4.3 Legal demand Notice: It is the onus on the complainant to manifest that he made a demand for the payment of the cheque amount by giving a notice in writing, to the drawer of the cheque, within 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid. In this regard, CW-1 deposing through his affidavit (Ex-CW1/A) has brought on record the demand notice dated 31.05.2016 (Ex-CW 1/7) which was sent vide postal receipt and tracking report Ex CW1/8 & Ex. CW-1/9. The accused has denied the receipt of legal demand notice. During cross-examination of accused, the accused stated that address at point A of the Ex. CW-1/7 belongs to the accused. The accused has in his defence merely made a denial simpliciter regarding the non-receipt of legal notice and has not supported his contention with any other corroborating evidence. The accused has admitted the address on the legal demand notice. So, it cannot be said to be the case that the notice was delivered on a different address. Thus, the evidentiary fact of receipt of legal notice stands proved.
Further, in addendum Hon'ble Supreme Court in the case of C.C. Alavi Haji v. Palapetty Muhammed and Another(2007) 6 SCC 555 held that a person failing to pay within the 15 days of the service of summon cannot hide behind the defence of non-receipt of legal notice. The relevant extract has been reproduced below:
"17. It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer Ct. Cases 20970/2016 Orient Bell Ltd. Vs. Puneet Seth Proprietor of M/s. Faalcon Page No. 6 of 11 who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C. Act and Section 114of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very object of the legislation."
Thus the defence of non-service of legal notice is specious and is hereby rejected. The legal mandate of serving legal demand notice on the accused stands satisfied.
4.4 Rebuttal of Presumption by Accused :
4.4(a) The above discussion manifest that the foundational ingredients of the s. 138 of the NI Act is established. This would give rise to the presumption of the cheque having been issued in discharge of a legally sustainable liability and drawn for good consideration, by virtue of conjoint reading of s. 118 (a) and 139 of the NI Act.
S.139 of the NI Act stands as an exception to the general rule as to the burden of proof and shifts the onus on the accused. The expression "unless the contrary is proved" endows the accused with the opportunity to rebut the presumption. It encapsulates the principle of "reverse onus" and thus the determination of successful rebuttal would be on the touchstone of proportionality. The same has been settled in the authoritative pronouncement by a three judge bench of the Hon'ble Supreme Court in the case of Rangappa Vs. S.Mohan (2010) 11 SCC 441. Ct. Cases 20970/2016 Orient Bell Ltd. Vs. Puneet Seth Proprietor of M/s. Faalcon Page No. 7 of 11 The relevant extract is reproduced:
"28...In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of `preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own..."
4.4(b) Thus, in accordance with the above authoritative mandate the accused has to either show that consideration and debt did not exist or that under the particular circumstances of the case the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. The accused can do so by either bringing positive evidence on record or by using the existing material on record.
4.4(c) Now, it would be apposite to analyze whether the accused has succeeded in rebutting the presumption raised against him. The accused has entered into witness box as DW-1 and stated that he was working for M/s. Imperia Structure Ltd. It was agreed that the complainant will be billing to M/s. Faalcon and the payment made by M/s. Imperia Structure Ltd., as the tiles were going to use the site work for M/s. Imperia Structure Ct. Cases 20970/2016 Orient Bell Ltd. Vs. Puneet Seth Proprietor of M/s. Faalcon Page No. 8 of 11 Ltd. It is further stated by the accused that M/s. Imperia Structure Ltd. has not paid the bills raised by the accused. The accused has also relied upon the mail conversation between complainant, M/s. Imperia Structure Ltd. and accused Ex. DW-1/1. However, during cross-examination of the accused, he has admitted that the purchase order has been placed by the accused firm. He has further admitted that the mail dated 05.03.2016 was sent by the accused firm vide which he has asked the complainant to present the cheque after 25th March 2016. Meaning thereby the accused has admitted the case of the complainant that the material was supplied on the purchase order placed by the accused. The accused has also admitted that the cheque in question has issued by the complainant after filling the details. Merely because the material was supplied at the address of Imperia infrastructure Pvt. Ltd. does not mean dissolve the liability of the accused for getting the material from the complainant. Moreover, Section 138 uses the words "where any cheque" and therefore, the cheque could be drawn for whatever reason and the drawer would be liable if it is drawn on an account maintained by him with a banker in favour of another person for the discharge of any debt or other liability. In other words, the cheque could be issued for the discharge of the debt or liability of the drawer or of any other person. Hence the fact that the cheque has been issued to pay the liability of M/s. Imperia Infrastructure Pvt. Ltd. is not a defence to the offence of Section 138 NI Act. Accordingly, it can be said that the cheque was issued by the accused in discharge of legal enforceable debt.
4.4 (d) It has been argued by Ld. counsel for the accused that in the complaint and ledger Ex. CW-1/3, the complainant has alleged that the Ct. Cases 20970/2016 Orient Bell Ltd. Vs. Puneet Seth Proprietor of M/s. Faalcon Page No. 9 of 11 amount due towards the accused is Rs. 3,23,145/- and Rs. 3,23,645/- respectively, but the amount in the cheque is Rs. 3,23,845/- that is more than the debt shown in the complaint and the ledger. During the cross- examination of complainant, the CW-1 was specifically asked about the calculation of amount of Rs. 3,23,835/- as mentioned in the cheque. The complainant stated that the amount has been filled by the accused. The documents filled by the complainant shows that the amount dues is Rs. 3,23,645. Though the amount was filled by the accused in cheque, the complaint had to make endorsement on the cheque before presenting it. It is a settled law that the cheque in question has to cover the enforceable debt and if the cheque is more than the amount due, Section 138 NI Act cannot be attracted as the sum reflected on the cheque would not be legal enforceable debt. In the present matter, the cheque amount is more than the amount mentioned in the complaint and the ledger, so it cannot be said that the sum reflected on the cheque is legal enforceable debt.
In view of the above discussion, it can be said that the accused has discharged the burden of proof. The accused has been able to establish that the cheque was not issued in discharge of legal enforceable debt on the principle of preponderance of probabilities. Accused is able to dislodge the presumption in favour of the complainant. This being the case, the factum of existing liability stands rebutted.
5. Conclusion:
5.1 Thus the unequivocal conclusion that comes forth is that the complainant has succeeded in establishing beyond any reasonable doubt of the culpability under s. 138 of the NI Act. Accordingly, accused Puneet Ct. Cases 20970/2016 Orient Bell Ltd. Vs. Puneet Seth Proprietor of M/s. Faalcon Page No. 10 of 11 Seth stands acquitted of the offence culpability under s. 138 of the NI Act.Digitally signed
KIRANDEEP by KIRANDEEP KAUR KAUR Date: 2024.02.12 15:19:56 +0530 Announced in the open court (KIRANDEEP KAUR) On 12.02.2024 MM-03(NI) ACT (West) THC, Delhi /12.02.2024 Certified that this judgment contains 11 pages and each page bears my signature.
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